Tag Archives: mandated benefits

Left on #ObamaCare: high insurance premiums don’t matter, as other people will pay for it

At Forbes, Avik Roy writes:

Over the past twelve months, there has been an energetic debate among health policy researchers about the extent to which Obamacare will increase the underlying cost of individually-purchased health insurance: what observers have come to call “rate shock.” Yesterday, the Manhattan Institute published the most comprehensive study yet on the topic, analyzing premium data from 3,137 U.S. counties, and finding an average rate hike of 49 percent. In response, left-wing bloggers are trying out a new talking point: that rate shock doesn’t matter, because taxpayer-funded subsidies will bear the higher costs.

There are a number of reasons why the underlying cost of health insurance matters.

Read more: Left: Obamacare Rate Shock Doesn’t Matter, Because Other People’s Money Will Pay For It – Forbes.

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Filed under insurance, tax code, HSAs

Obamacare’s not-so essential benefits

In the Providence Journal, Sally Pipes of the Pacific Research Institute writes:

Federal officials at the Department of Health and Human Services just finalized rules governing health insurance for individuals and small businesses purchased through Obamacare’s new exchanges. The announcement brings us a step closer to a health-care system wherein spending continues to grow rapidly while basic coverage remains unaffordable.

Just look at what will be considered “Essential Health Benefits” (EHB). Starting in 2014, insurance plans must cover everything from mental-health and drug-abuse treatments to dental and vision for children — regardless of
whether patients want or need them.

Mandating such generous health plans for all will surely drive premiums through the roof. …

In Connecticut, for instance, insurance mandates account for 22 percent of premiums for group coverage and 18 percent for individual plans, according to the University of Connecticut’s Center for Public Health and Health Policy. …

Indeed, patients between ages 18 and 24 can expect their premiums to rise by roughly 45 percent. Those aged 25 to 29 will see a 35 percent jump, according to a study from Oliver Wyman, a consultancy. The same study showed that a three-to-one age band would drive half a million young Americans out of the insurance market.

Read more: Obamacare’s not-so-essential benefits.

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Filed under Policy - National

Is ObamaCare’s medical-loss ratio mandate increase health insurance premiums

From Peter Suderman at Reason.com:

Over the weekend, The New York Times published a report noting that health insurers across the nation are both “seeking and winning double-digit increases in premiums” — this despite the fact that “one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.” …

What’s going on? Why are these rates going up?

Suderman explains how mandated benefits explain some of the increase.  He then explains a less obvious culprit: mandatory medical loss ratios. Suderman writes:

The MLR is an accounting requirement which says that insurers have to spend at least 80 percent of their total premium revenue on medical expenses, leaving just 20 percent for administrative costs, marketing, and other non-medical expenditures. Any insurer that fails to meet this target must issue rebates to customers. This year, insurers rebated about $1 billion.

The MLR provision creates two incentives for insurers to jack up health insurance premiums. One is the plain fact that with profit and administrative costs capped as a percentage of premium revenue, the easiest way to generate larger profits is to charge higher premiums.

The other is that the rebate requirement means insurers may need to charge higher up-front premiums in order to protect themselves from the risk of a bad year.

Read more: Is ObamaCare Causing Health Insurance Premiums to Rise? – Hit & Run : Reason.com.

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The Battle Of The Narrative: How Ordinary Americans Can Fight ObamaCare

At Forbes, Paul Hsieh, MD writes:

As the problems of ObamaCare inevitably emerge, the big question will be whether they will be blamed on the residual free-market elements of our health system or on the new government controls. This will be the battle of the “narrative.” …

If we let the government shift responsibility for ObamaCare’s problems onto the residual private sector, those problems will eventually be used to justify a government-run “single payer” system. On the other hand, if Americans hold the government appropriately responsible, we stand a chance at adopting genuine free-market health reforms. …

The government is already planning its own health care propaganda campaign aimed at the American people. …

Ordinary Americans can fight back by speaking out against the government narrative when appropriate with family and friends.

Read the whole article: The Battle Of The Narrative: How Ordinary Americans Can Fight ObamaCare – Forbes.

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ObamaCare’s ‘Essential Health Benefits’: Few States Implement, HHS ‘Is in Clear Violation of the Law’

Michael Cannon writes:

ObamaCare directs the Secretary of Health and Human Services to define the “essential health benefits” that all consumers in the individual and small-group health insurance markets must purchase. HHS Secretary Kathleen Sebelius kicked that decision to the states, giving them a deadline of this past Friday, September 30. Kaiser Health News reports that all of 16 states submitted an Essential Health Benefits (EHB) benchmark to HHS by the deadline.

But did Sebelius have the authority to kick this decision to states?

No. Cannon quotes  Pennsylvania Insurance Commissioner Michael Consedine:

HHS guidance appears to render the states’ ability to innovate and to make an independent choice illusory

Louisiana’s Secretary of Health and Hospitals Bruce Greenstein and Insurance Commissioner James Donelson school Sebelius:

The State of Louisiana will not permit the federal government to dictate to our residents a default benchmark plan, as the federal government, in its disregard of the requirements of the Administrative Procedure Act regarding essential health benefits and other provisions of the PPACA, has no authority to do so under federal or Louisiana law until regulations are published in the Federal Register, following established notice and comment procedure.

The process developed for defining the essential health benefit benchmark has been a completely new method of establishing law without proper rulemaking. Implementation of new policies without open and public comment and publication in the Federal Register is in clear violation of the law.

Read the whole post: ObamaCare’s ‘Essential Health Benefits’: Few States Implement, HHS ‘Is in Clear Violation of the Law’ | Cato @ Liberty.

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Free-market solutions for pre-existing conditions, & without ObamaCare’s perverse incentives

In an article published in Psychology Today, health economist John C. Goodman writes:

In my book Priceless: Curing the Healthcare Crisis, I argue that we do not need more spending, more regulations, or more bureaucracy to fix the problems of our current system. Unfortunately, the Affordable Care Act prescribes heavy doses of all three. One outcome will be to make the problem of perverse incentives worse.

Here are ten ways to deal with the problem of pre-existing conditions that give people good incentives instead of perverse incentives.

Here’s the list.  See the full article for explanations:

  1. Encourage Portable Insurance.
  2. Allow Special Health Savings Accounts for the Chronically Ill.
  3. Allow Special Needs Health Insurance.
  4. Allow Health Status Insurance.
  5. Allow Self-Insurance for Changes in Health Status.
  6. Give Individual Buyers the Same Tax Break Employees Get.
  7. Allow Providers to Repackage and Reprice Their Services Under Medicare and Medicaid.
  8. Allow Access to Mandate-Free Insurance.
  9. Create a National Market for Health Insurance.
  10. Encourage Post-Retirement Health Insurance.

via Better Solutions for Pre-Existing Conditions | The Beacon.

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Filed under insurance, tax code, HSAs

Obamacare outlaws half of all individual plans sold

Kenneth Artz, a freelance reporter for The Heartland Institute, writes:

Although President Obama promised that if you like your health care plan you can keep it, a new report shows more than half of all insurance plans for individuals in the United States won’t survive under his health care law.

According to the study from the Commonwealth Fund, published in Health Affairs and conducted by researchers at the University of Chicago and Towers Watson, more than half of the people who had individual health insurance in 2010 were enrolled in plans that won’t pass the new standards set up by Obama’s law.

Read more: Half of Individual Insurance Policies Eliminated By Obamacare | Heartlander Magazine.

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